TIF sought for infrastructure

November 20, 2007|By Russ Keen, rkeen@aberdeennews.com

Aberdeen Development Corp. wants to use tax increment financing to help pay for infrastructure for a new facility that will house a wind-blade manufacturing plant. Eligible infrastructure costs are estimated to be $3.5 million, and about $3.7 million is available for the tax increment financing, also known as TIF, according to project-plan documents on file with the city of Aberdeen. The Aberdeen Planning Commission will discuss the project when it meets at 7 tonight in the community room in the Brown County Courthouse Annex, 25 Market St. A TIF allows property taxes on improvements to be used to help pay off bonds issued to pay for the improvements. The city would issue the bonds, which must be paid back within 20 years. The planned improvements to the site on Aberdeen's northeast side will result in about $310,000 in additional property taxes annually, according to the project plan. Under the TIF, those taxes would be collected as usual but used to pay off the bonds. Total project costs for the building and site work are estimated at $21 million. The development corporation plans to lease the facility to Molded Fiber Glass Cos. of Ashtabula, Ohio. Including the equipment the company will install, it will be a $40 million operation, officials said Monday. The project plans states, “Without TIF financing, the Aberdeen Development Corp. will not be able to offer the lease rates required by the company to locate their facility in Aberdeen.” The lease will consist of a base rate. In addition, Molded Fiber Glass will pay all other costs associated with the building, such as utilities. The seven-year lease with two, five-year options to continue is an operating lease only with no equity accumulation for Molded Fiber Glass. The state is helping the company, too. Gov. Mike Rounds announced Monday in Aberdeen that the state will contribute $5 million for training of Molded Fiber Glass employees.